You are now leaving BlackRock’s website

You are leaving BlackRock’s website and entering a third-party website that is not controlled, maintained, or monitored by BlackRock. BlackRock is not responsible for the content or availability of the third-party website. By leaving BlackRock’s website, you will be subject to the third-party website’s terms, policies and/or notices, including those related to privacy and security, as applicable. Please review such policies and notices on the third-party website.

Fixed income ETFs

Learn more about how iShares fixed income ETFs can help you manage risk, enhance yield, and navigate Asia’s evolving markets.
Close-up of a classical building exterior with large fluted columns supporting an entablature, suggesting a government or museum structure.

Understanding fixed income ETFs

Fixed income ETFs – or bond ETFs – provide exposure to diversified baskets of bonds—ranging from government and investment-grade corporates to high yield and emerging markets, combining the transparency and liquidity of equities with the income-generating potential of bonds.

Today, bond ETFs have transformed the way institutional investors manage fixed income. What was once a fragmented, over-the-counter market is today a highly accessible and efficient way for institutional investors to access fixed income markets.

BlackRock believes that global bond ETFs are well positioned to reach US$6 trillion by the end of 20301.

Thematic Exposures include:

  • iBonds ETFs
  • BuyWrite ETFs
  • Active ETFs
  • Rate / Inflation Hedged ETFs

23

Number of years since launching the first bond ETFs in 20022

350

More than 350 iShares bond ETFs listed globally2

$1T

Total iShares bond ETF AUM (~40% of global AUM), in USD2

$19B

In active bond ETF assets managed by iShares, in USD2

55%

Market share in industry-wide target maturity bond ETFs2

Case studies

Potentially enhance yield without excess credit risk

An institutional investor with a USD-denominated portfolio sought to enhance yield, while only modestly increasing credit risk. The portfolio manager was willing to consider expanding the credit universe to achieve their goal.   

The portfolio manager purchased a USD-denominated investment grade corporate bond ETF, which included several benefits:

  • Higher yield relative to base government market
  • Diversified investment of more than 2500 securities
  • Ease of execution
  • On-exchange liquidity

Upon review of this investment, the investment committee recognized that gaining exposure to the asset class did not expose the portfolio to individual security risk. It also allowed a lower minimum credit rating tolerance for an index exposure. While a security default would still affect the value of the index, it would be partially mitigated by name diversification in the index.

Balancing investment performance with liquidity management

A portfolio manager must balance cash flow needs, while simultaneously maintaining exposure and limiting the effects of cash drag. With rising interest rates and wider credit spreads increasing the cost of funding, a reduction in new bond issuance volumes can challenge liquidity for investors. Therefore, the portfolio manager prefers to use a cash sleeve for liquidity management instead of frequently buying and selling individual bonds. However, employing such a strategy can lead to performance drag.

Investors can use bond ETFs, in both stressed and less volatile market environments to replicate a liquid version of the broader portfolio.  

ETFs allowed the portfolio manager to achieve a low-cost exposure without incurring the cash drag of uninvested assets.

Fixed income insights

Learn more about iShares

iShares is a part of BlackRock

iShares has been a leader in the ETF marketplace for more than two decades. Our products are built by investment professionals with deep risk management expertise.
Read more

BlackRock

© 2026 BlackRock, Inc. All rights reserved.